Which four of the following statements about accounting ratios are correct?
1. They are useful when comparing a business results from one year to the next
2. Gearing will indicate how risky a business is
3. Interest cover will give an investor information about whether or not a dividend will be paid
4. If there is an increase in any calculated accounting ratio, it is seen as favourable
5. They help the user of financial information to focus attention on significant issues
6. They can provide information about the profitability, liquidity, efficiency and position of the company
7.Ratios can be affected by a business choice of accounting policies
8.They provide all the information needed for interpreting company accounts
Sir , what is your view on this ,as to me five statements seems to be correct (1,2,5,6,7)
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Ok , Thanks!
You are welcome.
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